Investing during retirement can be a daunting task, but with a sound plan, your path to success is well within reach. A quality plan for retirement focuses on these four areas:
Income planning
You need to be sure you’ll have a sustainable income stream to pay expenses for the rest of your life. This typically includes:
- How to maximize Social Security benefits
- Balance sources of income and living expenses
- Protection against the negative effects of inflation
- A plan for the surviving spouse
- How to ensure you don’t outlive your assets
Investment planning
Investing during retirement is different, with emphasis on managing risk to ensure your assets are available when you need them. The approach should include:
- Ways to reduce risk while still working towards your goals
- Managing volatility and avoiding the emotional stress of watching the value of stock holdings shrink during market setbacks
- Flexibility to adjust withdrawal rates from your portfolio
- Comprehensive money management strategies
Health care planning
Retirees need a plan to address rising health care costs in an increasingly complex and ever-changing landscape. Strategies should include:
- Analyzing aspects of Medicare parts A, B and D
- Considering options for long-term care
Tax planning
Your retirement plan should consider ways to decrease tax liabilities.
- Analyzing which investments to own in tax-deferred accounts and which to own in taxable accounts
- Assessing when it make sense to convert or contribute to a tax-free Roth IRA
- Determining what asset should be withdrawn from which accounts to potentially reduce your tax burden
- Discussing ways to leave tax-free dollars to your heirs
Retirement is not easy to navigate. There is more to investing in retirement than buying and holding a good mutual fund or picking good stocks. You could spend decades in retirement and you need to be sure you have reliable income streams that last your lifetime. This requires an integrated plan. A trusted advisor can help set realistic expectations and determine the right retirement plan for you.
